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Making Sense of Dynamics 365 Price Plans

Making Sense of Dynamics 365 Price Plans

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Making Sense of Dynamics 365 Price Plans
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Making Sense of Dynamics 365 Price Plans

On November 1st Microsoft CRM Online was re-launched as Dynamics 365 and the price jumped from €65 to €115 per user per month on the “Hero” edition – once called Pro, now called Enterprise Plan 1 – while the €25 middle-of-the-road offering, Basic, was dropped.

Depending on how you look at it, this was either a whopping price increase from Pro (and Basic) or a significant price reduction from CRM Online Enterprise, which, at €165 was not selling at all well. Most surprising of all, a new low-cost client costing €10 was introduced with a read-everything write-something tag.

At the high end this appears to be a re-positioning against its main rival, Salesforce, which costs €75 at the low end and €300 at the high, with a €150 cost for its “most popular” offering.

Democratising CRM

Still, there is no hiding the fact that this is a colossal price hike at the high end and a land grab at the low. Many CRM customers think they are over-licensed and over-charged for what they’re using. Microsoft’s answer is to give a low-cost client to everyone in the audience, democratising CRM and taking it out of its silo.

Those who need full functionality will have two main options:

  • Enterprise Plan 1 costing €115 and incorporating Sales, Customer Service, Field Service & Project Automation modules. (The marketing module has been offloaded to Adobe.)
  • Enterprise App Plans, where each module (Sales, Customer Service, etc.) is available standalone at an App price of €95.
  • All other users will have Team Members at €10, with nothing between this and the Enterprise Plans.

At the cost of each standalone Plan (€95) it is obvious that the Enterprise Plan incorporating all four modules at a €20 premium is a no-brainer, especially when it comes to high volume deployments (100 or more). Tiers 2, 3, 4 and 5 (1,000+ users) provide a discount waterfall of 22% - 48%.

Editions and segments

There’s more: Dynamics 365 will be sold in an Enterprise Edition as described here to Commercial, Government and Educational entities with 250 users or more (no minimum requirement) and in a Business Edition for sites with fewer than 300 users. On the face of it this is a surprising piece of market segmentation, as 250 is not a number we associate with corporate CRM installs. 10-100 is probably a more realistic range, while a maximum of 300 users shouldn’t trouble even sizable corporate customers.

Worse still, Enterprise Edition was available on November 1st, while Business Edition won’t be available until the first calendar quarter of 2017. Strangely, Business is based on Navision, while Enterprise Edition offers AX (Operations) as an optional Enterprise Plan 2. This is all very confusing. Furthermore, Business will not be available in an on-premises version while Enterprise will!

Finally, there is a streamlined program approach. Enterprise Edition will only be available in Enterprise Agreement, MPSA (Microsoft Products and Services Agreement), CSP (Cloud Solution Partner), and Web Direct (MOSP), while Business Edition (also called Dynamics 365 for Financials) will only be available in CSP. No on-premises options.

In conclusion

What we can fathom from all of this is that Microsoft is committed to introducing and maintaining two CRM products: Dynamics 365 (traditional CRM Sales and Customer Service, but with lots of additional functionality such as Field Service, Project Automation, Power Apps, Flow, and a Web Portal (acquired from AdxStudio) and Dynamics 365 Business Edition, also called Dynamics 365 for Financials. What still remains to be seen is whether the Enterprise offering, which is available online and on-premises, will convince current CRM customers to upgrade, or whether some will wait for the as yet untested and unproven Business Edition which is a pure Cloud play.

In Ergo we’re working hard to keep the focus on the solutions enabled by the licensing rather than the problems thrown up by the messaging.

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